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ROLANDO SASAN v. NLRC 4TH DIVISION

FACTS:

This case involves a contract for services between respondent Equitable-PCI Bank (E-PCIBank) and Helpmate, Inc. (HI), wherein HI would provide janitorial and messengerial services to E-PCIBank. Petitioners, who are employees of HI, were assigned to work at E-PCIBank's branches. Petitioners filed complaints for illegal dismissal against E-PCIBank and HI, claiming that they were regular employees of E-PCIBank and were illegally dismissed by HI. E-PCIBank argued that HI is an independent job contractor and therefore responsible for the dismissal of the petitioners. HI claimed that it was an independent job contractor and that the petitioners were assigned to new work assignments but refused to comply.

The labor arbiter found that HI is a labor-only contractor and that E-PCIBank is the real employer of the petitioners. The labor arbiter awarded backwages and separation pay to the petitioners.

The respondents appealed the decision to the National Labor Relations Commission (NLRC) and submitted additional documents to establish that Helpmate, Inc. is a legitimate job contractor. The NLRC modified the decision of the Labor Arbiter, considering the new evidence and declaring Helpmate, Inc. as a highly capitalized venture engaged in legitimate contracting. The NLRC ruled that the complaints for illegal dismissal were prematurely filed and deleted the awards for backwages and separation pay, but affirmed the award for 13th month pay and attorney's fees.

The Court of Appeals affirmed the findings of the NLRC that Helpmate, Inc. was a legitimate job contractor and did not illegally dismiss the petitioners. The contract between Helpmate, Inc. and Equitable PCI Bank had expired, and Helpmate, Inc. offered the petitioners new work assignments, but they refused without justifiable reason. The Court of Appeals held that there was no illegal dismissal and denied the petition.

The petitioners now come before the Supreme Court, raising issues as to whether the Court of Appeals exceeded its jurisdiction and committed grave abuse of discretion in upholding the decision of the NLRC and accepting evidence submitted by the respondents during appeal.

ISSUES:

  1. Whether the Court of Appeals committed grave abuse of discretion in accepting and appreciating the evidence submitted by respondents during appeal, which were not presented before the Labor Arbiter.

  2. Whether the Court of Appeals erred in reversing the factual finding of the NLRC that respondent HI was a labor-only contractor.

  3. Whether the Court of Appeals erred in ruling that the illegal dismissal complaints were prematurely filed.

  4. Whether HI is a legitimate job contractor.

  5. Whether E-PCIBank should be deemed petitioners' principal employer.

  6. Whether petitioners were illegally dismissed from their employment.

  7. Whether HI is engaged in prohibited labor-only contracting.

  8. Whether HI has substantial capital or investment to actually perform the job, work, or service under its own account or responsibility.

  9. Whether or not the petitioners should be considered as regular employees of E-PCIBank.

  10. Whether or not the petitioners were illegally dismissed by HI.

RULING:

  1. The Court ruled in favor of the respondents and denied the petition. The Court found that the NLRC may admit evidence, not presented before the Labor Arbiter, and submitted to the NLRC for the first time on appeal. Technical rules of evidence are not binding in labor cases. The submission of additional evidence on appeal does not prejudice the other party as they can submit counter-evidence. The Court also explained that the NLRC and labor arbiters are directed to use every and all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law and procedure, all in the interest of substantial justice. The Court concluded that the documentary evidence submitted by respondents, even if they were mere photocopies, were admissible and could be considered in the case.

  2. The court finds substantial evidence to support the finding that HI is a legitimate job contractor. HI has been issued a Certificate of Registration by the Department of Labor and Employment, which carries with it the presumption that it was issued in the regular performance of official duty. In the absence of proof, the petitioner's assertion cannot prevail over this presumption.

  3. The court did not provide a ruling on whether E-PCIBank should be deemed petitioners' principal employer.

  4. The court did not provide a ruling on whether petitioners were illegally dismissed from their employment.

  5. The Court ruled that HI is not engaged in prohibited labor-only contracting. The NLRC and the Court of Appeals also ruled in favor of HI.

  6. The Court held that HI has proven to have substantial capital and investment in the form of tools, equipment, machineries, work premises, among others. Therefore, HI possesses the requirement of substantial capital or investment.

  7. The petitioners will never become regular employees of E-PCIBank regardless of how long they were working for the latter.

  8. The pull-out of the petitioners from E-PCIBank did not constitute illegal dismissal since they were not employees of E-PCIBank and were pulled out due to the non-renewal of the Contract of Service between HI and E-PCIBank. The complaint for illegal dismissal is premature.

PRINCIPLES:

  • Technical rules of evidence are not binding in labor cases.

  • Labor officials should use every reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process.

  • The NLRC may consider evidence, such as documents and affidavits, submitted by the parties for the first time on appeal.

  • The submission of additional evidence on appeal does not prejudice the other party, as they can submit counter-evidence.

  • Proceedings before the NLRC are not covered by the technical rules of evidence and procedure as observed in the regular courts.

  • Technical rules of evidence do not apply if the decision to grant the petition proceeds from an examination of its sufficiency as well as a careful look into the arguments contained in position papers and other documents.

  • Due process requires a fair and reasonable opportunity to explain one's side and seek reconsideration of the ruling. It is not the denial of the right to be heard but the denial of the opportunity to be heard that constitutes a violation of due process.

  • Permissible job contracting or subcontracting involves distinct and independent business, substantial capital or investment, and an agreement that assures contractual employees of their labor and occupational safety and health standards, right to self-organization, security of tenure, and social and welfare benefits.

  • Labor-only contracting, which is prohibited, involves a contractor or subcontractor that does not have substantial capital or investment to perform the job and employees performing activities directly related to the principal's main business.

  • In determining whether a contractor is engaged in legitimate job contracting or prohibited labor-only contracting, various factors should be considered such as the nature and extent of the work, skill required, term and duration of the relationship, control and supervision of the work, control of premises, duty to supply premises, tools, appliances, materials, and labor, and the mode and manner or terms of payment.

  • A certificate of registration issued by the Department of Labor and Employment carries with it a presumption of regularity. In the absence of evidence to the contrary, it can be presumed that the DOLE thoroughly evaluated the requirements submitted by the job contractor.

  • "Substantial capital or investment" refers to capital stocks and subscribed capitalization in the case of corporations, tools, equipment, implements, machineries, and work premises, actually and directly used by the contractor or subcontractor in the performance or completion of the job, work, or service contracted out.

  • Once an entity has proven substantial capital, it is no longer necessary to provide further evidence that it does not fall under the purview of "labor-only" contracting.

  • Services rendered by employees, such as janitors, messengers, and drivers, may be directly related to the principal business of a company but may not be necessary in the conduct of its principal business.

  • In determining the existence of an employer-employee relationship, the four standards are applicable: the manner of selection and engagement of the employee, the mode of payment of wages, the presence or absence of the power of dismissal, and the presence or absence of control over the employee's conduct. The most determinative among these factors is the "control test."

  • The existence of an employer-employee relationship is shown when the selection and engagement of the employee is done by the entity. The entity is responsible for paying wages and providing other benefits to the employees. The entity also has the power to control the employees' conduct and does not possess the power of dismissal.

  • Employees under a Contract of Service are not considered as regular employees of the company they are assigned to.

  • Premature filing of a complaint for illegal dismissal may result in the dismissal of the complaint.